US Commerce Department Investigates DeepSeek’s AI Chip Use Amid Concerns Over Chip Smuggling
NEW YORK – The US Commerce Department is investigating whether DeepSeek, a pioneering Chinese AI company, has been using US chips that are not permitted to be shipped to China. This investigation is following the recent launch of DeepSeek’s AI assistant, which garnered widespread attention and sparked concerns over US technological dominance.
DeepSeek’s AI Assistant Gains Popularity
DeepSeek recently introduced a free assistant that uses significantly less data and costs a fraction of comparable US models. This new offering rapidly became the most downloaded app on Apple’s App Store, stirring worries about the United States’ leadership in artificial intelligence.
Within days of its launch, DeepSeek’s entry into the market triggered a market downturn that erased around US$1 trillion off the value of US technology stocks.
Current Restrictions on AI Chips
Current regulations prohibit the shipment of Nvidia’s most advanced AI processors to China. Any violation of these export controls could have serious implications for both companies involved.
Efforts to Smuggle AI Chips into China
There have been documented instances of organized AI chip smuggling operations originating from countries including Malaysia, Singapore, and the United Arab Emirates.
Nvidia’s Perspective
Nvidia has stated that its revenue from Singapore accounts for about 20% of its total sales. However, Nvidia’s public filings record revenue based on billing locations, not shipping destinations. This suggests that products billed to Singaporean entities could still be destined for other markets, including China.
Nvidia emphasizes that its business partners adhere to all relevant export laws and regulations. The company is committed to taking action if it discovers any violations.
DeepSeek’s Chip Usage
DeepSeek claims to have used Nvidia’s H800 chips, which were legally available in 2023. It is unclear whether DeepSeek has acquired other restricted chips prohibited from shipping to China.
Additionally, DeepSeek reportedly possesses Nvidia’s less powerful H20 series chips, which could still be lawfully shipped to China. However, regulatory changes under the Biden and Trump administrations have explored whether these chips should be subject to stricter controls.
Expert Opinions and Legislative Actions
Dario Amodei, CEO of AI company Anthropic, has commented that a significant portion of DeepSeek’s AI chip inventory consists of chips that are not banned but should be, chips that were shipped before the ban was implemented, and some that appear to have been smuggled.
Lawmakers Weigh In
Two US lawmakers, John Moolenaar and Raja Krishnamoorthi, have urged the Trump administration to curb exports of Nvidia’s H20 chips and similar products. They also advocated for tightening controls on shipments via third countries that pose a high risk of diversion, specifically mentioning Singapore.
In a letter to National Security Adviser Mike Waltz, Moolenaar and Krishnamoorthi suggested that Singapore should face stricter licensing requirements unless it commits to addressing Chinese transshipments through its territory.
Conclusion
The investigation into DeepSeek’s AI chip usage underscores the ongoing concerns about the integrity of international supply chains and the enforcement of export controls. As technology continues to advance, These challenges will likely necessitate closer cooperation and regulation to maintain a secure and competitive technological landscape.
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